Japan recorded 20 consecutive months of surplus in its current account. The surplus reached JPY 2,43 trillion by
expectations (JPY 2,03 trillion) were exceeded seriously. The main reasons are sought in oil prices and the high exchange rate of JPY, but we should not forget that the currency itself can not be a reason, or only a tool that is run (good or bad) of politicians and Central Bank.
The current account is the first major section of the balance of payments, the widest measure of export and import trade flows. Traditionally, politicians seek positive balance, but in the real economy impact of strong plus is similar to the strong minus. The most positive in the long run always values must be close to zero (i.e. close to equilibrium). In the last quarter of the last year, the current account surplus of Japan, according to Bloomberg, rose to 3.3% of GDP, which assumes that makes JPY more attractive. Many investors, however, turn to the yen just as a refuge currency in decline or negative sentiment towards stocks and other risk assets worldwide.
Another hidden effect comes from the back-returning of capital to Japan. This is partly conceals the problems of weaker real
export. Companies outside the country actually return money back to Japan. View from this direction makes the outlook for Japanese companies much more negative in the medium-term horizon.
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